When you start an LLC, it’s  an exciting time for a business owner, but it can also be daunting. There’s a lot to think about, from paperwork and certification to registration and more.

We’re making the process as simple as possible in this six-step guide. We’ll take you through the LLC journey from picking a name to registration and forming your LLC. It’s important to note that how you start an LLC will depend on the state you’re in, so check local legislation as you go.

In this article:

6 steps to create a business

1. Choose a business name
2. Find a registered agent
3. Get an EIN (Employer Identification Number)
4. File the Articles of Organization (Certificate of Formation)
5. Create an Operating Agreement for your LLC
6. Additional things to consider when creating an LLC

More about the LLC

1. Choose a business name

Every business needs a name. Before registering your business, make sure the matching domain name is available. The last thing you want is to choose a name to find it’s already in use or trademarked.

Enter your desired domain into the search bar and hit Buy It. If the domain is available, it’ll be there for sale; if it isn’t, GoDaddy will provide options that might inspire you.

An available domain indicates that the business name is available, but do your due diligence and check via registration offices.

There may also be state restrictions on words you can use within your business name. Restricted words might include ‘bank,’ ‘trust’, ‘trustee’,’ or ‘corporation.’ Basically, your business name must reflect your business and not be misleading.

Once you’ve confirmed your business name is available for use, you can buy a domain, choose a web hosting plan and create your website for your own online business.

For more information on the importance of domains, check out the video below.

2. Find a registered agent

Appointing a registered agent is a must-do in the process of starting an LLC in most states. Your registered agent will generally need to have a physical address in the state in which your LLC is registering.

The role of the LLC registered agent is to pass important documentation to key personnel within the LLC. Your registered agent will forward documentation such as legal notices and tax forms. Your registered agent should notify you of any legal issues at your earliest convenience. It’s an important role and if someone within the company is going to take it, they need to be diligent.

In many cases, the option for a registered agent service is highly desirable. This way, you can hire someone (or a company) to handle the legal and administrative tasks of being a registered agent. Hiring someone is especially useful if there’s no one qualified or happy to take on that role within the LLC. Or, if there’s no physical address within the state the company is registering in.

3. Get an EIN (Employer Identification Number)

Your EIN (Employer Identification Number) is a unique number given to you by the IRS. It is essential for many types of activities, including opening a business account, hiring employees, filing taxes (the EIN is used to identify the business), applying for licenses and permits, and more.

Essentially your EIN proves you’re an established business.

4. File the Articles of Organization (Certificate of Formation)

Your Articles of Organization (aka. Certification of Formation) is a form that you can pick up from the state’s Secretary of State.

You will need to file the form and provide the information required. Each state has its own form so it’s important to make sure you’ve picked up the correct one. You can expect to fill out your typical information, such as the company name, business address, names and addresses of the LLC owners.

When it comes to submitting the form, you may need to pay a filing fee. The fee will vary between states. You might find it’s as little as $50, but it can cost around $100 and more.

5. Create an Operating Agreement for your LLC

Your Operating Agreement is a bit like a contract between owners. The document is legally binding and outlines how the LLC will be managed. Importantly, the Operating Agreement is in place to outline how profit and losses are shared.

Although the Operating Agreement is a legal document, you can see how this agreement could be used to resolve potential future conflicts. The agreement means that all owners are aligned on some of the most important aspects of starting an LLC.

When creating this agreement, it can be helpful to work with a lawyer.

6. Additional things to consider when creating an LLC

Finally, take a moment to think about any other items that are state-specific, or necessary to start your LLC with the best possible foundations.

Some extra considerations might include:

• Setting up a business bank account. Although a separate account to manage business finances is best practice for any business, when you start an LLC, you want to be especially diligent in keeping your personal finances from your business finances. This will make tax returns infinitely less confusing, and you must remember, with an LLC, you have a business that is a separate entity from you, so it will have its own bank account.

• Obtain permits and licenses. You might need specific licensing and permits depending on your industry and location. Be sure to check that all your paperwork is neatly gathered and legally compliant.
• Registering to do business in other states. If you’re registered in one state but have assets or employees in other states, you may need to register to do business elsewhere. This is dependent on the states you’re working within. If you need to register in other states, you’ll need a registered agent there, too.

What are the benefits of an LLC?

There are benefits to starting an LLC, and below we’ve listed some of the most desirable reasons why you might want to switch to an LLC business model.

• Limited liability protection removes liability from you personally. Your business becomes its own entity, responsible for its own debts or legal obligations.
• Pass-through taxation allows owners to take earnings without paying tax first. The profits and losses pass through to the owners’ personal tax returns.
• Easy to form and maintain (especially now that you’ve read this article). LLCs can be set up in as little as six steps.
• Business credibility is developed from having a registered LLC business. It could even help secure higher ticket clients or help justify price increases.
• Transfer of ownership is easy and flexible for LLCs.

Your questions about starting an LLC, answered:

It’s common to have a lot of questions before deciding whether or not to make the leap into an LLC business. Here, we’re answering commonly asked questions.

What is the lifespan of an LLC?

The lifespan of an LLC varies, but some states require LLCs have a lifespan of 30 years. In some states, the lifespan of an LLC is indefinite and can continue until the owners dissolve it.

How do you make money with an LLC?

You can make money as part of an LLC as you would in any business. Your LLC might make money buying and selling products through selling services or offering memberships and subscriptions to customers.

The main difference is how you make money with an LLC. As the owner, you might also be contracted to work. So your LLC pays you a wage.

Should I pay myself a salary from my LLC?

You should seek financial support before deciding how to pay yourself through your LLC, but as above, there’s an option to pay for contracted hours for services benefitting the business. Or, as the owner, you can take distributions.

What is the downside of an LLC?

Managing an LLC requires some further work that could be perceived as a downside. For example, you will need to manage paperwork and filing differently. If you used to manage taxes alone, you might start considering an accountant to help manage your finances as you start an LLC.

Can I use my personal money for my LLC?

As a business owner, you can use personal money to fund an LLC. This is particularly common in the early days of starting an LLC.

Final thoughts on starting an LLC.

Owning and managing an LLC doesn’t stop with the six steps feature above. Once you know how to start an LLC, you must look after it and keep your new-found LLC in line with the state’s ongoing requirements. You’ll need to file reports and accounts accordingly. And on top of that, you must keep an eye out for potential changes in legislation.

Whilst it can feel overwhelming, there are attorneys and accountants to help you take the right steps when starting an LLC. And, when the time comes to managing new legislation, you’ll feel ready to tackle it when the time is right.

Starting a business in 2023 needn’t be overwhelming. I get it, there’s a lot to think about and as a new entrepreneur, there’s one thing on your mind: money. Can you afford it, will the business sustain you, how will you juggle your side hustle alongside your life commitments – maybe even another full-time job – exactly how much does it cost to start a business in 2023?

No doubt, there’s a lot to think about, but the more you think the more reasons you’ll find not to follow your dreams and that’s the last thing I want for you.

So, instead of overthinking, read through this comprehensive guide including a breakdown of startup costs and tips to manage costs at every step.

Fixed costs to start a business in 2023

The fixed costs of your startup will depend on the type of business. As a freelancer you can start up a business for $0, assuming you already own a PC and have access to Wi-Fi.

Businesses that need more involvement from operations, products or digital assets like websites may need to spend more.

The cost of your business will be unique, but you can use the guides below to determine how much it costs to start your dream business in 2023.

Domain, website or online store

The majority of startups need a website either to trade and receive enquiries online or for a presence in Google search and Google maps for local search.

That said, if you’re starting a service-based business you may be able to drum up business without a website by using social media platforms like LinkedIn. This is what I did for two years, keeping my start-up cost at $0.

To save the cost of a website, ecommerce stores can create shops on Etsy and pay minimal fees to upload products. Then, it’s just a commission on sales. Alternatively, you can start affiliate marketing on TikTok which costs nothing to set up.

While free alternatives are great, at some point your business will likely grow to a point where you want a more robust online presence. And ecommerce merchants should be prepared to source a point-of-sale (POS) system or technology allowing them to accept online payments.

For entrepreneurs who need a website, start by sourcing your domain and hosting.

In general, non-premium domains cost between $1 to $20, depending on the deal you are getting and the number of years you decide to register the domain for. To explore prices buy a domain and search for your desired website URL.

Tips for managing the cost of domains: you can cut costs by exploring cheaper domain suffixes. Generally, but not always, .com or .co.uk will be more expensive than .co, .io, .site, .shop. There are a lot of domain options so spend some time exploring suffixes and pricing.

Your website host is required to get your site on the internet and in front of customers. You’ll need to web hosting.

Tips for managing the cost of hosting: pay annually or for many years in advance to save money.

Website design and development

For those who need to create a website you can use drag-and-drop editors. This is perfect if you really want to cut costs. You can build brochure websites or use the online store builder if you’re starting with ecommerce.

If you’re not willing to create the website yourself, then don’t fret because there are affordable website design services to guarantee a website you (and your customers) will love. I’ve known entrepreneurs who started with websites that are quite affordable.

Tips for managing the cost of website design and build: if the thought of designing and developing a website is overwhelming, but you want to save costs, commit a couple of hours to creating a website with GoDaddy. I promise it’s easy and you might surprise yourself.

While you’re creating a website, consider creating a logo to display on your web pages and other brand collateral. Services like GoDaddy Logo Maker are free and let you quickly snag this key piece of branding.

Legal costs to register a business

Legal costs vary hugely between types of business and the required legal cover. If you’ve figured out how to create an LLC and you’re ready for the costs associated you can expect to pay anything from $485 to more than $1,000. Of course, this depends on what you can do yourself. More savvy start-ups may be able to tackle some of the legal requirements, thus saving money.

Tips for managing legal costs: consider the essentials. As a new business owner, it can be tempting to cover your business from every angle, but this may not be required at the very beginning. Consider what’s a must-have to start up, then take note of what you can purchase later and when it’s needed.

Marketing

Marketing is one of the most flexible costs when starting a business. The options are endless.

At the cheapest, GoDaddy can support your business from $85/month, but a more multi-channelled approach will cost $500/month*.

The good thing about marketing is that you can do a lot alone. If you’re happy to manage social media platforms to drum up business, you can do well without spending a penny. It is time-consuming so that time investment must be considered.

If you’re thinking about marketing your business with ads then you need to consider the cost of ads versus the benefit. Generally, it’s not useful to start with a budget that’s too small simply because you won’t get the data you need to decipher a good ads campaign from a bad one. Don’t start an ads campaign until you’re ready to commit.

Tips for managing marketing costs: choose your marketing channels carefully, and do your research to find out which one is likely to have the biggest impact. It’s better to cover fewer channels well than many channels poorly. After all, you can always scale once you’ve nailed one platform.

Variable costs to start a business in 2023

Some prices are incredibly variable depending on location and the needs of the business. These items are listed below.

Physical location

The beauty of starting a business in 2023 is that many businesses won’t need a physical location, but if you’re opening a brick-and-mortar store or plan to work in an office you’ll need to think about rent or mortgages.

Products or inventory

If you need to buy and hold stock you’ll need to outlay an initial investment upfront. The cost will vary on the units required. You can manage these costs by thinking carefully about what you’re likely to sell. Another consideration is what you can sell if you buy stock in bulk.

Tips for managing product and inventory costs: ask suppliers about their minimum order quantity (MOQ) and how costs vary on quantity. Also, consider drop shipping so you don’t have to outlay any costs at all.

Staff

Staff costs depend on seniority and location. You’ll need to consider the minimum wage of your state, but the federal minimum wage is $7.25.

Tips for managing staffing costs: businesses trading online can outsource work to talented new freelancers or over-pay freelancers in different parts of the world. You can also take on more work yourself or turn to software and AI to support your business.

Taxes

Beyond the initial registration, startups need to consider tax. The rules surrounding tax vary so you must check the rules within the country in which your business is registered.

Paying your taxes usually means putting a percentage of your income aside to cover the costs, monitoring and recording your expenses to account correctly for tax write-offs or hiring an accountant to manage taxes for you.

Tips for managing tax costs:  the more self-efficient you are, the less you need to pay an accountant. Many small businesses can manage the early tax returns alone, but a growing business will likely need an accountant eventually. Manage the costs by putting money aside regularly.

On-going expenses

As a small business you’re likely to have ongoing expenses. You may not start with them but over time you’ll likely invest in subscriptions or software. Or, you might have shipping to consider for e-commerce. Costs will vary based on your requirements.

Tips for managing ongoing expenses: on-going expenses can creep up on business owners so be mindful of monthly subscriptions and the well-intentioned software you purchased. If you’re not using it, you’re throwing away money.

Unexpected costs

No matter what, any business is likely to be hit with an unexpected cost, eventually. Prepare for the unexpected by holding a budget to get you out of an emergency situation. Unexpected costs could include your sickness, the need to hire a consultant to solve a problem fast or if you’re in a brick-and-mortar store something could go wrong within the building.

How to fund your startup or small business

Getting funding for your new business is likely on your mind. Here are some common ways to earn funding for your start up.

Personal investment

Funding your business on your own can be a safe option. It removes the stress of meeting investor expectations and it can feel really good to know you build your new business with your own means.

Personal investment may require you to save for a few years before you get started, but freedom from other stakeholders can be highly desirable in the early stages.

Borrowing money through contacts

You can opt to borrow money from your personal contacts, friends and family, for example. If you choose to go down this route it’s really important to treat it as you would as a formal investment: draw up contracts, separate personal and businesses conversations. Be very clear on what the contract is.

Loans

Securing loans from banks is an option for funding. Generally, banks provide calculators on their websites so you can gage what you might be able to borrow. Be aware that it isn’t easy to get accepted for a bank loan, 80 – 90% of startups fail so banks are naturally careful who they lend money to.

Create a budget for your first year

Let’s take a look at various cost summaries for businesses with varying needs.

Freelance business

Your freelance service-based business cost summary is one of the cheapest businesses to start, it might look a bit like this:

Service-based business

For those starting a service-based business and desire a more professional appeal can kick off a new business venture with a functioning site.

Here’s what the cost summary can look like:

Marketing costs for the first year

If you choose to work with a service provider like GoDaddy your digital marketing services can be covered for as low as $85.00/month.

Businesses you can start with a small budget

The digital world has opened a world of opportunity when it comes to starting a business for free or with a small budget.

Assuming you’ve got a PC, wi-fi and a desire to work or use social media to generate leads, you can start any of the following small business ideas, for free:

• Freelancing in digital services like writing, SEO, PPC, social media management or email marketing.
• Freelancing on platforms like Upwork or Fiverr.
• Affiliate marketing through social media platforms like TikTok. You will need to gain 1,000 followers before you can start this one.
• Consulting in a skill you already have (or can learn for free online).

Local services you can start with little to no start-up costs:

• Dog walking
• Babysitting
• Homesitting
• Handyman
• Tutoring

Some businesses require a small budget to start, for example:

• Selling digital downloads on Etsy. You’ll pay a small fee to upload products, but then nothing until you make your first sale where you pay a percentage to Etsy.
• Dropshipping
• Selling on eBay.
• Print (assuming you’re doing the printing)

Closing thoughts on starting a business in 2023

Today, there is a lot of technology out there that can boost the success of your business. While there might be expenses associated with it, don’t forget the financial rewards that come with a successful venture. Keep that momentum going and make 2023 the year you founded a business to be proud of.

*Pricing data valid on March 2023. All prices listed are subject to change.

Whether you’re new to remote work or a seasoned pro looking to up your game, you might be wondering, “What is a dedicated IP address?” or “Do I really need a dedicated IP for remote work?” Both are valid questions — especially now.

Since the shift to remote work, businesses and employees have dealt with increasing security risks and threats. Many telecommuters use VPNs or SSL certificates for a secure remote work experience, but it’s often not enough. Business owners and organizations are also advised to get a dedicated IP address for an added layer of protection.

The question is – is a dedicated IP worth it if you’re working outside of a traditional office space?

Before you decide whether to get a dedicated IP address or not, read on to learn to basics and benefits, including:

What is an IP address?

An internet protocol (IP) address is a unique address assigned to individual computers, servers, domains, or devices over the internet or a local network. Whenever you access a website, your computer communicates to the webserver through the IP address.

IP addresses consist of four sets of numbers, each separated by periods (x.x.x.x), ranging from 0 to 255, which comes out to around 4.2 billion combinations.

The conventional IP address we’re used to is the IPv4 (IP version 4). It was created in the 1980s and used a 32-bit system that didn’t account for how fast the internet would grow. We have long since exhausted those 4.2 billion combinations. Thus, a new internet addressing system called IPv6 was deployed in 1999.

IP addresses and the Domain Name System (DNS)

IP addresses aren’t random. They are produced and assigned by the Internet Assigned Numbers Authority (IANA), part of the Internet Corporation for Assigned Names and Numbers (ICANN).

The ICANN is a non-profit organization that maintains internet security. One of its functions is to maintain the domain name system (DNS). You can think of the DNS as a phonebook that matches domain names to IP addresses.

The DNS was born because IP addresses are composed of a string of numbers – making it difficult for users to remember which numbers belonged to which website. Without the DNS, you would have to type in “64.233.187.99” to get to Google and other IP addresses to get to other websites.

How IP addresses work

Your network, devices and the internet use IP addresses to communicate with each other. Let’s look at how IP addresses work when connecting your device to the internet.

Before your device can access the internet, it must connect to a network. That network would likely be your Internet Service Provider (ISP) if you’re at home, while it would be public Wi-Fi if you’re outside your home network.

Internet activity goes through the ISP, which is shared with your device using an IP address. In this case, the ISP assigns an IP address to your device. That assigned IP address, however, is temporary. When you turn your modem or router off, your device gets disconnected from the network. Or, when you travel, your device uses another network to connect to the internet.

That new network you connect to (hotel, coffee shop, or airport Wi-Fi) shares a different IP address. This is but one of many examples of how devices use IP addresses to communicate with each other.

There are several types of IP addresses, which we’ll explore in the next section.

Different types of IP addresses

There are different types of IP addresses, which are further subdivided into different categories.

Consumer IP addresses and website IP addresses are the main types of IP addresses.

Consumer IP address

Consumer IP addresses are assigned to devices connected to the internet. There are two kinds of consumer IP addresses: private and public IP addresses.

These types describe a network’s location: private IP addresses are used inside a network, while public IP addresses are used outside.

Private IP vs. Public IP

Your network router assigns private IP addresses to your devices to communicate with it internally. In contrast, your ISP assigns public IP addresses. The public IP is the primary address associated with your internet network.

Private IP addresses exist because multiple devices connect to a household’s network. Modern homes have computers, smartphones, tablets and even Bluetooth-enabled devices such as speakers, printers or smart TVs connecting to a router at any given time.

Because your router connects to so many devices, it needs a way to identify each item. Thus, it generates private IP addresses that differentiate each device on the internal network.

While each device connected to the network has its own private IP address to communicate with the router, remember that all devices simultaneously access the internet through the router as well. Thus, they all have the same public IP address.

Public IP addresses are further classified into two kinds – static and dynamic. These types describe a network’s permanency.

Dynamic IP vs. Static IP

A dynamic IP address is an IP address that often changes, while a static IP address does not change. ISPs and web hosting companies automatically assign dynamic IP addresses while they manually create static IP addresses.

Dynamic IP addresses are the most common type of IP address. They are only active for a certain amount of time, after which they expire. Once the computer disconnects from the network, it receives a new IP address or requests a new one.

Advantages of dynamic IP addresses include cost savings and security. ISPs buy multiple IP addresses and assign them to users. Automating the movement of IP addresses means there’s no need to get users their original IP addresses. Once a user is disconnected, ISPs can reassign a new IP address and give new users the old one to use.

Additionally, a changing IP makes it harder for criminals to hack into your network.

Individuals and businesses seldom use static IP addresses. Servers hosting large websites or providing email and FTP services use static IP addresses so other devices can easily find them on the web.

Website IP address

The website IP address is the other type of IP address besides the consumer IP.

If consumer IPs are assigned to devices connected to the internet, website IPs are used for web hosting packages. There are two types of website IPs: shared and dedicated.

We’ll be focusing on these two types, specifically dedicated IP addresses.

Dedicated IP address vs. Shared IP address

You can get a dedicated IP address and shared IP address from hosting providers, but the main difference is the number of users assigned to it.

Dedicated IPs are exclusive to a single account, while a shared IP is assigned to multiple users.

Shared IP addresses are often common to shared hosting accounts. This type of web hosting plan hosts multiple websites on the same server, making it possible for these domains to share an IP address.

But, while shared IP addresses are common in shared hosting plans, it is also possible to have a shared IP address without a shared server. For instance, some Managed WordPress hosting plans share IP addresses but not server resources.

Shared IP addresses are often dynamic IPs, while dedicated IP addresses are static. You have sole use over them once they’re assigned to you.

Important: Don’t confuse a dedicated IP address with a dedicated server; you can get a dedicated IP address without signing up for a dedicated hosting plan.

Benefits of a dedicated IP address

There are several benefits to having a single IP address dedicated to your use. It’s fast and secure, and there’s a smaller chance of your IP getting blacklisted.

Let’s explore each benefit in detail:

1. Secure remote access

A dedicated IP address allows employees to connect to company resources securely. It enables you to control access to specific resources and sensitive company assets. You can do this by allowing specific IP addresses and restricting access to servers and gateways you choose.

2. Reduced risk of IP blacklisting

Another benefit of a dedicated IP address is safety and location privacy. Some people prefer it when they can’t be traced.

While sharing an IP address is generally safe, it risks country-specific blocking of your website. Other websites on your server might perform illegal activities such as sending out spam emails, viruses, or malware that could get your websites blocked by search engines.

When you use a dedicated IP address for remote work or otherwise, there is zero chance of your IP getting blocked — unless you do something malicious intentionally.

3. Faster and safer file transfer

A dedicated IP ensures faster site speeds. You don’t have to contend with web traffic because you’re the only one using the IP address.

A dedicated IP also allows you to build a file transfer protocol (FTP) server to share files within an organization. A private FTP server offers better protection and a faster file transfer rate.

4. Improved email deliverability

You will benefit from a dedicated IP address if you send large volumes of emails; anything above 100,000+ per year is considered a large volume.

The main reason?

An IP’s reputation can impact your email delivery rate.

Email services such as Gmail and Yahoo trust emails from dedicated IPs more than those from shared IP addresses. They often double-check emails from shared IP addresses because spam emails are more likely to come from accounts hosted on those IPs.

5. Direct access to your website

Dedicated IP addresses allow you to access your website directly using the IP address since it’s the only domain mapped to that IP. For example, typing in “64.233.187.99” would lead you directly to Google because that is its dedicated IP address.

While it’s not the main advantage of having a dedicated IP, it is a handy perk when domain servers are down.

Dedicated IP address: A must-have for remote workers

Bottom line: Beef up your cybersecurity efforts with a dedicated IP address. It securely connects you to your remote server and improves site speed. That’s a win-win for remote workers and their employees and clients.

Need a dedicated IP address for remote work? Enjoy the benefits of dedicated IP by purchasing a GoDaddy dedicated IP as an add-on, or get one free by signing up for a GoDaddy dedicated hosting plan.